1. Technical Field
The present invention relates generally to pricing systems, and more specifically relates to a system and method for automatically setting pricing for resellers requesting a special price from a wholesaler.
2. Related Art
It is typical for wholesalers (e.g., manufacturers and distributors) to sell products to an intermediary who in turn resells the product(s) to the final end user. Often a contractual agreement exists between the wholesaler and the reseller defining what discount off of published list prices the reseller will receive when purchasing products from the wholesaler. This is known as the wholesale discount. For example, a wholesaler may give a reseller a 40% wholesale discount for a product having a published list price of $1000, i.e., $600. The reseller is then free to set the product price to their end users. If the reseller is unable to establish a price that is both agreeable to the end user and profitable to the reseller, and the particular transaction is important enough, it may be in the best interest of the reseller and the wholesaler to negotiate a “special wholesale pricing” for the transaction. For instance, instead of the usual 40% wholesale discount, the wholesaler may provide a special discount pricing of 45%, i.e., $550.
Before offering a special wholesale price, the wholesaler will typically consider: the size of the transaction, how much additional discount off of the existing wholesale discount is needed, what effect this price will have on future transactions, whether the reseller is being completely honest in their representation of the situation, etc. The negotiation of a special wholesale pricing for a unique transaction can be a laborious and time-consuming process. If not set properly, the special wholesale pricing may not be economically advantageous to the manufacturer. If the wholesale price setting is a common activity, maintaining price consistency can be difficult. Inconsistent or haphazard special wholesale prices can frustrate and damage the working relationship between the manufacturer and reseller.
Accordingly, a need exists for an automated system and method for setting special wholesale pricing when requested by a reseller.